Using Loans to Finance Life Insurance Premiums

Using Loans to Finance Life Insurance Premiums

When and how to use this strategy

Those purchasing significant death benefit life insurance often contemplate how to most efficiently pay policy premiums. Their aim is to maximize insurance benefits, pay as little as possible and minimize taxes. One option is to borrow from a commercial lender, finance company or private bank. This complex strategy, called “premium financing,” can be powerful but isn’t appropriate for all investors. Let’s take a closer look at this tool.

 

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TAGS: Insurance
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